Gold at Crucial Trading Zone – Time to Decide Long Term Trend!
Arslan Butt • 1 min read
As I mentioned in my earlier update, it was a good idea to close our long term sell before the Jackson Hole symposium as the unpredictable volatility caused so much trouble for both bulls and bears. Now, the gold is holding at a very crucial stage. It's time to plan for the long term.
Gold – Key Technical Drivers
The gold is still trading in a bullish channel. We can see in the below chart, gold prices are now trading above $1294, after testing the lower edge of the bullish channel.
50- periods EMA is providing a support at $1286 (4H Timeframe). Keep in mind that the gold has broken above the double top resistance level of $1297. To make sure that it's really broken, we need to wait for today's closing.
Gold – Bullish Channel – 4-Hour Chart
RSI Stochastic is holding in the selling zone (below 50), signaling that the gold has the potential for further buying. But, on the 4-hour time frame, it's massively overbought.
Now if gold stays below $1301, we are likely to sell a strong sell until 1280 – 1270. Whereas, above 12301-04 the yellow metal will enter the new bullish trading region of $1300 – $1325.
Gold Trading Plan
I'm looking to enter a sell position at $1304 with a stop loss above $1307 and take profit at $1291 and $1285. The trade setup will be more clear with time as we have US labor market figures by the end of the week. Till then, it's recommended to use small trading volume with risk management.